I was talking to a potential landlord who lives in Beaulieu Park the other day. He wants to purchase his first Buy to Let property and has noticed our rental index and previous articles, so was interested in getting to know the industry a little bit more. He had also noticed that quite a few apartments are coming up for sale in the Marconi Plaza development in Chelmsford city centre and quite likes the development.
He’s looking for a good return on his investment, as the money’s not really doing anything in the bank. He had noticed that there are a lot of properties available for Let in the same development, so I thought I would look into this in a bit more detail for him. This is what I found…
In the last year, 23 apartments have come to market in Marconi Plaza, with 13 currently either under offer or sold subject to contract at an average price of £208,561. The average rental price in the development at the moment is £1024, which could produce a fantastic 5.8% annual yield.
However, this isn’t the full story. As the development is quite swish and luxurious, the service charges and ground rents quite high. Therefore, before you go jumping in feet first, you must take this into account when doing your calculations.
Also, whilst the development has seen a rise in property values in the last year of 3.6%, this is below the Chelmsford average of 4.8%, but this is one of those classic examples of ‘What is more important, high yield or capital growth?’
If you would like to talk to us about your potential investment criteria, please come into our office on Duke Street.